PARK AEROSPACE CORP (PKE)

CIK: 0000076267. SIC: 3728 Aircraft Parts & Auxiliary Equipment, NEC. Latest 10-K as of: 2026-05-29.

SIC breadcrumb: Manufacturing > Transportation Equipment > SIC 3728 Aircraft Parts & Auxiliary Equipment, NEC

SEC company page: https://www.sec.gov/edgar/browse/?CIK=76267. Latest filing source: 0001437749-26-018900.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-29. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000076267.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Free cash flow = operating cash flow - capital expenditures. Missing metrics are omitted rather than fabricated.

Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-01-13. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000076267.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

Quarterly Charts

Macro Cross-References

• CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
• UNRATE - Unemployment Rate
• FEDFUNDS - Federal Funds Effective Rate
• CES0500000003 - Average Hourly Earnings of All Employees, Total Private
• DFEDTARU - Federal Funds Target Range - Upper Limit
• DFEDTARL - Federal Funds Target Range - Lower Limit
• DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
• DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
• DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
• DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
• T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
• CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
• CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
• CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
• CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
• PCEPI - Personal Consumption Expenditures: Chain-type Price Index
• PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
• PPIACO - Producer Price Index by Commodity: All Commodities
• T10YIE - 10-Year Breakeven Inflation Rate
• U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
• PAYEMS - All Employees, Total Nonfarm
• CIVPART - Labor Force Participation Rate
• EMRATIO - Employment-Population Ratio
• UNEMPLOY - Unemployed
• CE16OV - Employment Level
• ICSA - Initial Claims
• JTSJOL - Job Openings: Total Nonfarm
• JTSQUR - Quits: Total Nonfarm
• GDPC1 - Real Gross Domestic Product
• A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
• INDPRO - Industrial Production: Total Index
• TCU - Capacity Utilization: Total Index
• HOUST - New Privately-Owned Housing Units Started: Total Units
• PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
• RSAFS - Advance Retail Sales: Retail Trade
• PCE - Personal Consumption Expenditures
• DSPIC96 - Real Disposable Personal Income
• PSAVERT - Personal Saving Rate
• M2SL - M2
• BOPGSTB - U.S. International Trade in Goods and Services: Balance
• MSPUS - Median Sales Price of Houses Sold for the United States
• HSN1F - New One Family Houses Sold: United States
• RHORUSQ156N - Homeownership Rate in the United States
• TTLCONS - Total Construction Spending: Total Construction in the United States
• RRVRUSQ156N - Rental Vacancy Rate in the United States
• TOTALSL - Total Consumer Credit Owned and Securitized
• REVOLSL - Revolving Consumer Credit Owned and Securitized
• DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
• GDP - Gross Domestic Product
• GPDI - Gross Private Domestic Investment
• GCE - Government Consumption Expenditures and Gross Investment
• PCEC - Personal Consumption Expenditures
• NETEXP - Net Exports of Goods and Services
• GFDEBTN - Federal Debt: Total Public Debt
• GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
• FYFSD - Federal Surplus or Deficit
• FGRECPT - Federal Government Current Receipts
• FGEXPND - Federal Government: Current Expenditures
• MANEMP - All Employees, Manufacturing
• USCONS - All Employees, Construction
• USTRADE - All Employees, Retail Trade
• USFIRE - All Employees, Financial Activities
• USGOVT - All Employees, Government
• AWHAETP - Average Weekly Hours of All Employees, Total Private
• DGORDER - Manufacturers' New Orders: Durable Goods
• NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
• BUSINV - Total Business Inventories
• EXPGS - Exports of Goods and Services
• IMPGS - Imports of Goods and Services
• IR - Import Price Index (End Use): All Commodities
• PPIFIS - Producer Price Index by Commodity: Final Demand

Latest quarter (10-Q)

Latest 10-Q source: 0001437749-26-001184.

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Confidence: high. Filing date: 2026-01-13. Report date: 2025-11-30.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

General:

Park Aerospace Corp. (“Park” or the “Company”) develops and manufactures solution and hot-melt advanced composite materials used to produce composite structures for the global aerospace markets. Park’s advanced composite materials include film adhesives and lightning strike protection materials. Park offers an array of composite materials specifically designed for hand lay-up or automated fiber placement (“AFP”) manufacturing applications. Park’s advanced composite materials are used to produce primary and secondary structures for jet engines, large and regional transport aircraft, military aircraft, Unmanned Aerial Vehicles (“UAV”s commonly referred to as “drones”), business jets, general aviation aircraft and rotary wing aircraft. Park also offers specialty ablative materials for rocket motors and nozzles and specially designed materials for radome applications. As a complement to Park’s advanced composite materials offering, Park designs and fabricates composite parts, structures and assemblies and low volume tooling for the aerospace industry. Target markets for Park’s composite parts and structures (which include Park’s proprietary composite Sigma StrutTM and Alpha StrutTM product lines) are, among others, prototype and development aircraft, special mission aircraft, spares for legacy military and civilian aircraft and exotic spacecraft.

Financial Overview

The Company's net sales in the 13 weeks and 39 weeks ended November 30, 2025 were $17.3 million and $49.1 million, respectively, compared to $14.4 million and $45.1 million, respectively, in the 13 weeks and 39 weeks ended December 1, 2024. Net sales for the 13 weeks and 39 weeks ended November 30, 2025 were higher than in the comparable periods of the prior fiscal year. The increase for the 13 weeks and 39 week periods ended November 30, 2025 was primarily due to the robustness of the commercial and military equipment programs that the Company supplies.

The Company’s gross profits in the 13 weeks and 39 weeks ended November 30, 2025 were higher than the gross profits in the prior year’s comparable periods. The Company’s higher gross profits during the current 13 week and 39 week periods were primarily due to higher sales volumes, increased selling prices and a more favorable product mix.

The Company’s gross profit margins, measured as percentages of sales, were 34.1% and 32.0%, respectively, in the 13 weeks and 39 weeks ended November 30, 2025, compared to 26.6% and 28.1%, respectively, in the 13 weeks and 39 weeks ended December 1, 2024. The Company’s higher gross profit margins for the 13 weeks and 39 weeks ended November 30, 2025 compared to the prior year’s comparable periods were primarily due to higher sales volume, increased selling prices and more favorable sales mixes in the current periods.

The Company’s earnings before income taxes and net earnings increased 86.7% and 87.1%, respectively, in the 13 weeks ended November 30, 2025, compared to the 13 weeks ended December 1, 2024, primarily as a result of higher gross profit margins mentioned above and higher interest income in the current periods.

The Company’s earnings before income taxes and net earnings increased 58.1% and 60.4%, respectively, in the 39 weeks ended November 30, 2025, compared to the 39 weeks ended December 1, 2024, primarily due to the higher gross profit margins mentioned above, the previously reported charges incurred in the prior year related to the storm damage and higher interest income.

19

On May 19, 2024, the Company’s manufacturing facilities in Newton, Kansas were damaged by a strong storm which transited the area.  None of the Company’s manufacturing lines or equipment were damaged by the storm.  The roofs on all three buildings in the Company’s Newton, Kansas campus required repairs or replacement.  Also, multiple specialty HVAC units were damaged or destroyed. The Company recorded a charge of $1.1 million in the 39 weeks ended December 1, 2024 related to the damage and repair and downtime costs. There were no corresponding charges in the 39 weeks ended November 30, 2025.

The Company continues to experience inflation in costs of raw materials and supplies, freight costs and other costs and expenses. The impact of inflation on the Company’s profits has been largely mitigated by the Company’s ability to adjust pricing for a large portion of its sales to pass the impact of inflation through to its customers.

Programs in which the Company participates as a supplier are, in some cases, experiencing supply chain issues from other suppliers to the programs that could result in delays in production for certain customers of the Company. The Company’s sales may be impacted by these supply chain challenges that its customers are experiencing from other suppliers.

The Company has a number of long-term contracts pursuant to which certain of its customers, some of which represent a substantial portion of the Company’s revenue, place orders. Long-term contracts with the Company’s customers are primarily requirements-based and do not guarantee quantities. An order forecast is generally agreed concurrently with pricing for any applicable long-term contract. This order forecast is then typically updated periodically during the term of the contract. Purchase orders are generally received by the Company more than three months in advance of delivery.

Under a Business Partner Agreement with ArianeGroup SAS of Les Mureaux, France, Park is the exclusive North American distributor of ArianeGroup’s RAYCARB C2®B NG proprietary product.  RAYCARB C2®B NG is used to produce ablative composite materials for critical rocket and missile systems. Park is a long-term customer of ArianeGroup and uses ArianeGroup’s RAYCARB C2®B NG product in the production of many of Park’s key ablative materials, which Park supplies into critical rocket and missile programs. On March 27, 2025, Park and ArianeGroup entered into an agreement under which Park would advance funds to ArianeGroup against future purchases of C2®B product in the total amount in Euros of €4,587,000 payable in three installments in 2025, 2026, and 2027. These advanced funds are to be used to help fund the purchase and installation, by ArianeGroup, of additional manufacturing equipment for ArianeGroup’s production of C2®B product.

20

Results of Operations:

The following table sets forth the components of the Condensed Consolidated Statements of Operations:

13 Weeks Ended

39 Weeks Ended

(Amounts in thousands, except per share

November 30,

December 1,

%

November 30,

December 1,

%

amounts)

2025

2024

Change

2025

2024

Change

Net sales

$

17,333

$

14,408

20.3

%

$

49,114

$

45,087

8.9

%

Cost of sales

11,430

10,580

8.0

%

33,377

32,403

3.0

%

Gross profit

5,903

3,828

54.2

%

15,737

12,684

24.1

%

Selling, general and administrative expenses

2,259

1,982

14.0

%

6,829

6,139

11.2

%

Earnings from operations

3,644

1,846

97.4

%

8,908

6,545

36.1

%

Storm damage charge

-

-

0.0

%

-

(1,098

)

(100.0

)%

Interest and other income

343

290

18.3

%

1,088

874

24.5

%

Earnings from operations before income taxes

 3,987

2,136

86.7

% 

9,996

6,321

58.1

%

Income tax provision (Note 9)

1,037

559

85.5

%

2,562

1,685

52.0

%

Net earnings

$

2,950

$

1,577

87.1

%

$

7,434

$

4,636

60.4

%

Earnings per share:

Basic:

Basic earnings per share

$

0.15

$

0.08

87.5

%

$

0.37

$

0.23

60.9

%

Diluted:

Diluted earnings per share

$

0.15

$

0.08

87.5

%

$

0.37

$

0.23

60.9

%

Net Sales

The Company's net sales in the 13 weeks and 39 weeks ended November 30, 2025, were $17.3 million and $49.1 million, respectively, compared to $14.4 million and $45.1 million, respectively, in the 13 weeks and 39 weeks ended December 1, 2024. Sales for the 13-week and 39-week periods ended November 30, 2025 were higher than the comparable period of the prior year, primarily due to higher sales to the space, commercial and military markets partially offset by lower sales in the business aircraft market.

Gross Profit

The Company’s gross profit in the 13 weeks and 39 weeks ended November 30, 2025 was higher than the gross profit in the prior year’s comparable periods due to higher sales, sales price increases, a more favorable product mix and lower labor costs which were partially offset by higher overhead costs, including higher insurance costs, utilities, repairs and maintenance costs and salaries and fringe benefits as well as higher direct material costs.

21

The Company’s gross profit margins, measured as a percentage of sales, were 34.1% and 32.0%, respectively, in the 13 weeks and 39 weeks ended November 30, 2025, compared to 26.6% and 28.1%, respectively, in the 13 weeks and 39 weeks ended December 1, 2024. The higher gross profit margin for the 13 weeks ended November 30, 2025 compared to the prior year’s comparable period, was primarily due to a more favorable sales mix as well as sales price increases, lower labor costs and lower overhead costs as a percentage of sales partially offset by higher waste costs. The higher gross profit margin for the 39 weeks ended November 30, 2025 compared to the prior year’s comparable period, was primarily due to a more favorable sales mix, sales price increases and lower labor costs partially offset by higher freight costs.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased by $277,000, or 14.0%, during the 13 weeks ended November 30, 2025 compared to the 13 weeks ended December 1, 2024, and these expenses, measured as percentages of sales, were 13.0% in the 13 weeks ended November 30, 2025 compared to 13.8% in the 13 weeks ended December 1, 2024. The increase in selling, general and administrative expenses, in dollars, during the 13 weeks ended November 30, 2025 was primarily due to higher salaries, fringe benefits, incentive compensation, profit sharing expenses, travel expenses and professional fees partially offset by lower freight out expense.

Selling, general and administrative expenses increased by $690,000, or 11.2%, during the 39 weeks ended November 30, 2025 compared to the 39 weeks ended December 1, 2024, and these expenses, measured as a percentage of sales, were 13.9% in the 39 weeks ended November 30, 2025 compared to 13.6% in the 39 weeks ended December 1, 2024. The increase in selling, general and administrative expenses during the 39 weeks ended November 30, 2025 was primarily due to the higher salaries, fringe benefits, incentive compensation, profit sharing expenses, travel expenses, research and development expenses and professional fees partially offset by lower freight out, advertising and trade show expenses.

Selling, general and administrative expenses included stock option expenses of $105,000 and $294,000, respectively, for the 13 weeks and 39 weeks ended November 30, 2025, compared to stock option expenses of $105,000 and $295,000 for the 13 weeks and 39 weeks ended December 1, 2024.

Earnings from Operations

For the reasons set forth above, the Company’s earnings from operations were $3.6 million and $8.9 million, respectively, for the 13 weeks and 39 weeks ended November 30, 2025, compared to $1.8 million and $6.5 million, respectively, for the 13 weeks and 39 weeks ended December 1, 2024.

Interest and Other Income

Interest and other income were $343,000 and $1,088,000, respectively, for the 13 weeks and 39 weeks ended November 30, 2025, compared to $290,000 and $874,000, respectively, for the prior year's comparable periods. Interest income increased 18.3% and 24.5%, respectively, for the 13 weeks and 39 weeks ended November 30, 2025, primarily due to interest received on tax refunds in the 39 weeks ended November 30, 2025 and a foreign exchange gain recorded related to a long-term supplier advance.

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Confidence: high. Filing date: 2026-05-29. Report date: 2026-03-01.

ITEM 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

General:

Park Aerospace Corp. (“Park” or the “Company”) is an aerospace company which develops and manufactures solution and hot-melt advanced composite materials used to produce composite structures for the global aerospace markets. Park’s advanced composite materials include film adhesives and lightning strike protection materials. Park offers an array of composite materials specifically designed for hand lay-up or automated fiber placement (AFP) manufacturing applications. Park’s advanced composite materials are used to produce primary and secondary structures for jet engines, large and regional transport aircraft, military aircraft, Unmanned Aerial Vehicles (UAVs commonly referred to as “drones”), business jets, general aviation aircraft and rotary wing aircraft. Park also offers specialty ablative materials for rocket motors and nozzles and specially designed materials for radome applications. As a complement to Park’s advanced composite materials offering, Park designs and fabricates composite parts, structures and assemblies and low-volume tooling for the aerospace industry. Target markets for Park’s composite parts and structures (which include Park’s proprietary composite SigmaStrut™ and AlphaStrut™ product lines) are, among others, prototype and development aircraft, special mission aircraft, spares for legacy military and civilian aircraft and exotic spacecraft.

The Company’s fiscal year is the 52- or 53-week period ending the Sunday nearest to the last day of February. The 2026, 2025, and 2024 fiscal years ended on March 1, 2026, March 2, 2025, and March 3, 2024, respectively. The 2026 and 2025 fiscal years each consisted of 52 weeks and the 2024 fiscal year consisted of 53 weeks. Unless otherwise indicated in this Discussion and Analysis, all references to years and quarters in this Discussion and Analysis are to the Company’s fiscal years and fiscal quarters, and all annual and quarterly information in this Discussion and Analysis is for such fiscal years and quarters, respectively.

2026 Financial Overview

The Company's total net sales worldwide in 2026 were 18% higher than in 2025. The increase in sales was primarily driven by an increase in sales in the military and commercial aircraft markets and, to a lesser extent, higher sales in the space market, partially offset by lower sales in the Business Aircraft market.

The Company’s gross profit margin, measured as a percentage of sales, increased to 30.9% in 2026 from 28.4% in 2025. The higher gross profit margin was the result of higher sales prices, a more favorable sales mix and lower labor and overhead costs as a percentage of sales due to improved leverage of these costs.

The Company’s earnings from operations in 2026, as a percentage of sales, were 18.4% compared to 15.1% in 2025, primarily as a result of the higher sales and improved gross margin partially offset by higher selling, general and administrative expenses. The higher selling, general and administrative expenses were due to higher salaries and fringe benefits, travel expenses, professional fees, incentive compensation and research and development expenses in 2026. The Company’s net earnings in 2026 were 92% higher than in 2025, primarily due to an 18% increase in sales, higher gross margins, higher interest income in 2026 and a $1.1 million storm damage charge in 2025. These increases were offset by higher selling, general and administrative expenses in 2026 as well as higher income tax expense in 2026. While income taxes increased in whole dollars in 2026, the 2026 tax rate decreased compared to the 2025 tax rate primarily as the result of a deferred tax provision recorded in the fourth quarter of fiscal 2025 on unrepatriated foreign earnings partially offset by a higher benefit from the reduction in uncertain tax positions in 2025 as compared to 2026.

24

The Company continues to experience inflation in costs of raw materials and supplies, freight costs and other costs and expenses. The impact of inflation on the Company’s profits has been partially mitigated by the Company’s ability to adjust pricing for a large portion of its sales to pass the impact of inflation through to its customers. The Company also experienced increasing costs resulting from the imposition of duties, tariffs, and similar governmental charges by the United States and certain foreign jurisdictions on the products of its customers and suppliers. The impact of these tariffs and other duties was largely mitigated by the Company’s ability to adjust pricing to pass the impact of these costs through to its customers.

Programs in which the Company participates as a supplier are, in some cases, experiencing supply chain issues from other suppliers to the programs that could result in delays in production for certain customers of the Company. These issues may be exacerbated by trade conflicts that restrict the transfer of funds or impose import and export controls on the Company’s products or supply chain inputs. The Company’s sales could also be impacted by these supply chain challenges to the extent that its customers are experiencing them from their other suppliers.

While the wars in Ukraine and the Middle East have had a negative impact on the Company’s results of operations due to delayed shipments, the Company may experience an increase in future sales due to increases in spending worldwide on missile defense systems and other defense programs. The Company does not have any significant customers in Russia or Ukraine but does have customers in Israel. The Company has experienced some increases to raw material costs from overseas suppliers due to the impacts of the wars in Ukraine and the Middle East.

The Company has a number of long-term contracts pursuant to which certain of its customers, some of which represent a substantial portion of the Company’s revenue, place orders. Long-term contracts with the Company’s customers are primarily requirements based and do not guarantee quantities. An order forecast is generally agreed concurrently with pricing for any applicable long-term contract. This order forecast is then typically updated periodically during the term of the underlying contract. Purchase orders are generally received more than three months in advance of delivery.

25

Results of Operations:

2026 Compared to 2025

Year Ended

March 1,

March 2,

(Amounts in thousands, except per share amounts)

2026

2025

Increase / (Decrease)

Net sales

$

73,301

$

62,026

$

11,275

18

%

Cost of sales

50,629

44,384

6,245

14

%

Gross profit

22,672

17,642

5,030

29

%

Selling, general and administrative expenses

9,172

8,246

926

11

%

Earnings from operations

13,500

9,396

4,104

44

%

Storm damage charge

-

(1,098

)

1,098

-100

%

Interest and other income

1,543

1,209

334

28

%

Earnings before income taxes

15,043

9,507

5,536

58

%

Income tax provision

3,771

3,625

146

4

%

Net earnings

$

11,272

$

5,882

$

5,390

92

%

Earnings per share:

Basic earnings per share

$

0.56

$

0.29

$

0.27

93

%

Diluted earnings per share

$

0.56

$

0.29

$

0.27

93

%

Net Sales

The Company’s total net sales worldwide in 2026 were 18% higher than in 2025. Higher sales in 2026 were primarily driven by increased sales in the military, commercial aerospace and space markets partially offset by decreased sales in the business aircraft market.

Gross Profit

The Company’s gross profit margin, measured as a percentage of sales, increased to 30.9% in 2026 from 28.4% in 2025. The higher gross profit margin was the result of higher sales prices, a more favorable sales mix and lower labor and overhead costs as a percentage of sales due to improved leverage of these costs.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased by $0.9 million, or 11%, during 2026 compared to 2025. Such expenses, measured as percentages of sales, were 12.5% and 13.3% during 2026 and 2025, respectively.

The increase in selling, general and administrative expenses in 2026 was primarily due to higher salaries and fringe benefits as well as higher travel expenses, professional fees, incentive compensation and research and development expenses. These increases were offset by lower outbound freight costs in 2026.

26

Earnings from Operations         

For the reasons set forth above, the Company’s earnings from operations were $13.5 million for 2026 compared to earnings from continuing operations of $9.4 million for 2025.

Storm Damage Charge

On May 19, 2024, the Company’s manufacturing facilities in Newton, Kansas were damaged by a strong storm which moved through the area.  None of the Company’s manufacturing lines or equipment were damaged by the storm.  Although the building structures are secure, the roofs on two of the three buildings in the Company’s Newton, Kansas campus needed significant repairs and the roof on one building needed to be replaced.  Also, multiple specialty HVAC units were damaged or destroyed.  These specialty HVAC units are necessary to control the temperature and humidity in certain manufacturing areas, quality laboratories and R&D laboratories, as required by certain specifications and certifications the Company is subject to.  The Company completed the repairs in the first quarter of 2026. The Company recorded a charge of $1.1 million in 2025 related to the damage and related repair and downtime costs.

Interest and Other Income/Expense

Interest and other income were $1.5 million in 2026 compared to $1.2 million in 2025. Higher weighted average interest rates in 2026 were offset by lower levels of marketable securities in 2026 due partially to share repurchases of $2.2 million in 2026, a $1.6 million advance payment made to a supplier in 2026 as well as a transition tax installment payment of $4.9 million made in the second quarter of 2026 related to the one-time transition tax on deemed repatriated earnings of non-US subsidiaries recorded in fiscal year 2018. During 2026 and 2025, the Company earned interest income principally from its investments, which were primarily in short-term instruments and money market funds.

Income Tax Provision

The Company’s effective income tax rate was 25.1% for 2026 compared to an effective rate of 38.1% for 2025. The decreased rate was due primarily to a deferred tax provision of $2.1 million recorded in the fourth quarter of fiscal 2025 on unrepatriated foreign earnings that the Company had previously considered to be indefinitely reinvested. Although the Company is currently involved in discussions with Asian industrial conglomerates regarding potential Asian based manufacturing joint ventures, the Company would consider contributing certain of its intellectual property to such joint ventures but would consider contributing only minimal capital to such joint ventures. Other than such potential joint ventures, the Company is not currently involved in any activities which would likely lead to the Company’s investment of such funds overseas. As a result, the Company has determined that it is unlikely that opportunities to invest these funds overseas will be realized in the foreseeable future, and, therefore, the Company has provided for the potential repatriation of such funds currently held by its Singapore subsidiary. In addition, 2025 effective income tax rate was positively impacted by U.S. federal rate and state income tax reductions in uncertain tax positions. The benefits from the reductions in 2025 were $1.1 million related to the expirations of statutes of limitations on tax positions taken in prior years regarding the taxability of funds repatriated from the Company’s subsidiary in Singapore and to the expiration of statutes of limitations related to state throw-back rates. The benefits from the reductions in uncertain tax positions in 2026 were not material. The decrease in the effective tax rate in 2026 was also due to the tax benefits from the exercise of nonqualified stock options in 2026.

27

Net Earnings from Operations

The Company’s net earnings for 2026 were $11.3 million compared to $5.9 million in 2025. The increase in net earnings was primarily due to higher net sales and related gross profit. As noted above, net earnings in 2025 included a $1.1 million charge related to storm damage incurred in May 2024 as well as a tax charge of $2.1 million for deferred taxes on undistributed foreign earnings. These charges were offset by a tax benefit from reduction in uncertain tax positions.

Basic and Diluted Earnings Per Share         

Basic and diluted earnings per share for 2026 were $0.56 compared to basic and diluted earnings per share for 2025 of $0.29. The higher earnings per share in 2026 reflects higher earnings in 2026 due to the reasons detailed above as well as the negative impact in 2025 of the storm damage charge and tax charge related to undistributed foreign earnings.

2025 Compared to 2024

Year Ended

March 2,

March 3,

(Amounts in thousands, except per share amounts)

2025

2024

Increase / (Decrease)

Net sales

$

62,026

$

56,004

$

6,022

11

%

Cost of sales

44,384

39,470

4,914

12

%

Gross profit

17,642

16,534

1,108

7

%

Selling, general and administrative expenses

8,246

8,154

92

1

%

Earnings from operations

9,396

8,380

1,016

12

%

Storm damage charge

(1,098

)

-

(1,098

)

-100

%

Interest and other income

1,209

1,053

156

15

%

Earnings before income taxes

9,507

9,433

74

1

%

Income tax provision

3,625

1,960

1,665

85

%

Net earnings

$

5,882

$

7,473

$

(1,591

)

-21

%

Earnings per share:

Basic:

Basic earnings per share

$

0.29

$

0.37

$

(0.08

)

-22

%

Diluted:

Diluted earnings per share

$

0.29

$

0.37

$

(0.08

)

-22

%

Net Sales

The Company’s total net sales worldwide in 2025 were 11% higher than in 2024. Higher sales in 2025 were primarily driven by increased sales in the military, commercial aerospace and business aircraft markets.

28

Gross Profit

The Company’s gross profit margin, measured as a percentage of sales, decreased to 28.4% in 2025 from 29.5% in 2024. The decrease in gross margin was primarily due to a less favorable product mix and higher labor and overhead costs due to ramping up manufacturing capacity in anticipation of customer program volume increases, as well as higher depreciation expense.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased by $0.1 million, or 1%, during 2025 compared to 2024. Such expenses, measured as percentages of sales, were 13.3% and 14.6% during 2025 and 2024, respectively.

The increase in selling, general and administrative expenses in 2025 was primarily due to higher salaries and fringe benefits as well as higher travel expenses, professional fees, and research and development expenses. These increases were offset by lower legal expenses in 2025 as well as lower incentive compensation and stock option expense and costs incurred in 2024 for shareholder activist defense costs and to settle an insurance claim as the result of the bankruptcy of an insurer and the additional week in 2024 compared to 2025, which resulted in higher fixed expenses in 2024.

Earnings from Operations         

For the reasons set forth above, the Company’s earnings from operations were $9.4 million for 2025 compared to earnings from continuing operations of $8.4 million for 2024.

Storm Damage Charge

On May 19, 2024, the Company’s manufacturing facilities in Newton, Kansas were damaged by a strong storm which moved through the area.  None of the Company’s manufacturing lines or equipment were damaged by the storm.  Although the building structures are secure, the roofs on two of the three buildings in the Company’s Newton, Kansas campus needed significant repairs and the roof on one building needed to be replaced.  Also, multiple specialty HVAC units were damaged or destroyed.  These specialty HVAC units are necessary to control the temperature and humidity in certain manufacturing areas, quality laboratories and R&D laboratories, as required by certain specifications and certifications the Company is subject to.  The Company completed the repairs in the first quarter of 2026. The Company recorded a charge of $1.1 million in 2025 related to the damage and related repair and downtime costs.

Interest and Other Income/Expense

Interest and other income were $1.2 million in 2025 compared to $1.1 million in 2024. Higher weighted average interest rates in 2025 were offset by lower levels of marketable securities in 2025 due partially to share repurchases of $4.3 million in 2025 as well as a transition tax installment payment of $4.2 million made in the second quarter of 2025 related to the one-time transition tax on deemed repatriated earnings of non-US subsidiaries recorded in fiscal year 2018. During 2025 and 2024, the Company earned interest income principally from its investments, which were primarily in short-term instruments and money market funds.

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Income Tax Provision

The Company’s effective income tax rate was 38.1% for 2025 compared to an effective rate of 20.8% for 2024. The increased rate was due primarily to a deferred tax provision of $2.1 million recorded in the fourth quarter of fiscal 2025 on unrepatriated foreign earnings that the Company had previously considered to be indefinitely reinvested. Although the Company is currently involved in discussions with Asian industrial conglomerates regarding potential Asian based manufacturing joint ventures, the Company would consider contributing certain of its intellectual property to such joint ventures but would consider contributing only minimal capital to such joint ventures. Other than such potential joint ventures, the Company is not currently involved in any activities which would likely lead to the Company’s investment of such funds overseas. As a result, the Company has determined that it is unlikely that opportunities to invest these funds overseas will be realized in the foreseeable future, and, therefore, the Company has provided for the potential repatriation of such funds currently held by its Singapore subsidiary. This increase in rate was offset by the U.S. federal rate and state income tax reductions in uncertain tax positions. The benefits from the reductions in 2025 and 2024 were $1.1 million and $0.6 million, respectively, related to the expirations of statutes of limitations on tax positions taken in prior years regarding the taxability of funds repatriated from the Company’s subsidiary in Singapore and to the expiration of statutes of limitations related to state throw-back rates.

Net Earnings from Operations

The Company’s net earnings from continuing operations for 2025 were $5.9 million compared to $7.5 million in 2024. As noted above, net earnings in 2025 included a $1.1 million charge related to storm damage incurred in May 2024 as well as a tax charge of $2.1 million for deferred taxes on undistributed foreign earnings. These charges were offset by a tax benefit from reduction in uncertain tax positions while net earnings in 2024 included shareholder activist defense costs, a charge related to the modification of previously issued stock options, legal costs stemming from the settlement of an insurance claim due to the bankruptcy of an insurance carrier and recruiting fees, partially offset by the tax benefit from the reduction in uncertain tax positions.

Basic and Diluted Earnings Per Share         

Basic and diluted earnings per share for 2025 were $0.29 compared to basic and diluted earnings per share for 2024 of $0.37. The lower earnings per share in 2025 reflects the impact of the storm damage charge as well the tax charge related to undistributed foreign earnings. These decreases were partially offset by higher sales in 2025 and a higher tax benefit from the reduction in uncertain tax positions in 2025 compared to 2024.

Liquidity and Capital Resources:

(Amounts in thousands)

March 1,

March 2,

2026

2025

Decrease

Cash and marketable securities

$

89,368

$

68,834

$

20,534

Working capital

102,714

81,033

21,681

From continuing operations

Fiscal Year Ended

(Amounts in thousands)

March 1,

March 2,

March 3,

Increase / (Decrease)

2026

2025

2024

2026 vs. 2025

2025 vs. 2024

Net cash provided by operating activities

$

11,499

$

4,717

$

4,408

$

6,782

$

309

Net cash provided by investing activities

34,851

23,987

31,388

10,864

(7,401

)

Net cash provided by (used in) financing activities

10,523

(13,650

)

(33,466

)

24,173

19,816

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On January 13, 2026, the Company entered into an Equity Distribution Agreement with Needham & Company, LLC (“Needham”) and Citizens JMP Securities, LLC (“Citizens”) (the “Distribution Agreement”) with respect to an “at the market offering” program under which the Company may offer and sell, from time to time at its sole discretion, shares of its common stock, par value $0.10 per share, having an aggregate offering price of up to $50.0 million through Needham and Citizens as its sales agents.  The Company is not obligated to sell any shares under the Distribution Agreement. Subject to the terms and conditions of the Distribution Agreement, Needham and Citizens will use commercially reasonable efforts, consistent with their normal trading and sales practices and applicable laws and regulations, to sell shares of the Company’s common stock from time to time based upon instructions received from the Company, including any price, time or size limits or other customary parameters or conditions specified, subject to certain limitations. Under the Distribution Agreement, Needham and Citizens may sell shares of the Company’s common stock by any method permitted by law deemed to be an "at the market offering" as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended.   The issuance and sale, if any, of shares of the Company’s common stock under the Distribution Agreement are made pursuant to a registration statement on Form S-3 that the Company filed with the U.S. Securities and Exchange Commission (“SEC”) on January 13, 2026 and was declared effective on January 21, 2026. The offering is described in a prospectus filed as part of the registration statement. During the fiscal year ended March 1, 2026, the Company sold 942,749 shares under the Distribution Agreement at an average price of $24.21 per share. Gross proceeds of $22.8 million were reduced by commissions and other expenses of $1.1 million resulting in net proceeds of $21.7 million. The remaining amount available to be sold under the Distribution Agreement as of March 1, 2026 was $27.2 million. The Company may, from time to time at its sole discretion, elect to sell additional shares of its common stock under the Distribution Agreement, subject to market conditions and other considerations.

Cash and Marketable Securities

The Company believes it has sufficient liquidity to fund its operating activities for the 12 months from the date of the filing of this Form 10-K Annual Report and for the foreseeable future thereafter. The Company expects the planned new composite materials manufacturing facility to be a significant capital project and, accordingly, anticipates funding-related expenditures from cash generated from operations, existing cash and marketable securities, and if appropriate, other available capital resources.

The change in cash and marketable securities as of March 1, 2026 compared to March 2, 2025 was primarily the result of the $21.7 million of proceeds from issuance of common stock under the “at the market offering” program described above and improved earnings in 2026 offset by repurchases of the Company’s common stock of $2.2 million in the first quarter of 2026, as well as a transition tax payment of $4.9 million made in the second quarter of 2026 and the payment of a supplier advance of $1.6 million made in the first quarter of 2026. The significant changes in cash provided by operating activities were as follows:

●

accounts receivable decreased by 15% as of March 1, 2026 compared to March 2, 2025 despite the increase in total net sales in the fourth quarter of 2026 compared to the fourth quarter of 2025; as the result of improved collections and the timing and mix of fourth quarter sales;

●

inventory increased 3% as of March 1, 2026 compared to March 2, 2025 due primarily to higher raw materials inventory to support first quarter shipments offset by lower finished goods inventory as of March 1, 2026;

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●

prepaid expenses decreased 32% as of March 1, 2026 compared to March 2, 2025 due to lower prepaid taxes as a result of utilization of prior year overpayments and lower interest receivable as the result of lower levels of marketable securities;

●

accounts payable increased 46% as of March 1, 2026 compared to March 2, 2025 due primarily to the timing of raw material purchases and other expenses in the fourth quarter of 2026 compared to 2025;

●

accrued liabilities increased 21% as of March 1, 2026 compared to March 2, 2025 due primarily to an increase in professional fee accruals and incentive payroll accruals; and

●

income taxes payable decreased 88% as of March 1, 2026 compared to March 2, 2025 due to the payment of the final remaining transition tax installment in 2026.

In addition, the Company paid $10.0 million and $10.1 million in cash dividends during 2026 and 2025, respectively.

Working Capital

Working capital as of March 1, 2026 increased $21.7 million compared to March 2, 2025. This was primarily due to the increase in cash and cash equivalents and marketable securities and lower current income taxes payable partially offset by lower accounts receivable, as well as higher accounts payable and accrued liabilities.

The Company's current ratio (the ratio of current assets to current liabilities) was 18.2 to 1 as of March 1, 2026 compared to 9.7 to 1 as of March 2, 2025.

Cash Flows

During 2026, the Company's net earnings before non-cash storm damage charges, depreciation and amortization, stock-based compensation, provision for deferred income taxes, loss on sales of marketable securities, amortization of bond premium and gain on sale of fixed assets, were $14.3 million compared to $11.3 million in fiscal 2025 and $11.1 million in fiscal 2024. Such earnings were decreased by changes in operating assets and liabilities of $2.8 million, $6.6 million and $6.7 million in fiscal 2026, 2025 and 2024, respectively. This resulted in $11.5 million, $4.7 million and $4.4 million of cash provided by operating activities from continuing operations in fiscal 2026, 2025 and 2025, respectively. During 2026, the Company expended $2.0 million for the purchase of property, plant and equipment compared to $0.9 million during 2025, and $0.6 million in 2024. Proceeds from the sale and maturities of marketable securities, net of purchases of marketable securities were $36.9 million, $24.9 million, and $32.0 million in 2026, 2025 and 2024, respectively. In 2026, the Company had cash proceeds from the issuance of stock of $21.7 million. The Company paid $10.0 million, $10.1 million and $30.6 million in cash dividends in 2026, 2025 and 2024, respectively. The 2024 dividends paid included a special dividend of $20.5 million paid in the first quarter of that year.  The Company expended $2.2 million, $4.3 million and $2.9 million in 2026, 2025 and 2024, respectively, on repurchases of common stock.

Other Liquidity Factors         

The Company believes that its existing cash, cash equivalents and marketable securities, and cash flow from operations will be sufficient to fund necessary capital expenditures and operating cash requirements for at least the next 12 months from the date of the filing of this Form 10-K Annual Report. The Company further believes that its consolidated balance sheet and financial position are very strong. 

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Contractual Obligations:

The Company's contractual obligations and other commercial commitments to make future payments under contracts, such as lease agreements, consist primarily of operating lease commitments, commitments to purchase raw materials and commitments to purchase equipment, as described in Note 9 of the Notes to Consolidated Financial Statements included elsewhere in this report. In March 2025, the Company entered into an agreement with a supplier, ArianeGroup SAS, under which the Company would advance funds against future purchases. The agreement requires payments of €4,587 over three years, of which €1,376 was paid in April 2025 (actual cost of $1,564), €1,835 was paid in May 2026 (actual cost of $2,156) and €1,376 (approximately $1,598 based on May 18, 2026 exchange rates) is due in the first quarter of fiscal 2028. The Company has no other long-term debt, capital lease obligations, unconditional purchase obligations or other long-term obligations, standby letters of credit, guarantees, standby repurchase obligations or other commercial commitments or contingent commitments, other than two standby letters of credit in the total amount of $0.1 million to secure the Company's obligations under its workers’ compensation insurance program.

Environmental Matters:

The Company is subject to various federal, state and local government and foreign government requirements relating to the protection of the environment. The Company believes that, as a general matter, its policies, practices and procedures are properly designed to prevent unreasonable risk of environmental damage and that its handling, manufacture, use and disposal of hazardous or toxic substances are in accord with environmental laws and regulations. However, mainly because of past operations of the Company’s former Electronics Business and operations of predecessor companies, which were generally in compliance with applicable laws at the time of the operations in question, the Company, like other companies engaged in similar businesses, is a party to claims by government agencies and third parties and has incurred remedial response and voluntary cleanup costs associated with environmental matters. Additional claims and costs involving past environmental matters may continue to arise in the future. It is the Company's policy to record appropriate liabilities for such matters when remedial efforts are probable and the costs can be reasonably estimated.

In 2026, 2025 and 2024, the Company incurred approximately $43,000, $37,000 and $29,000, respectively, for remedial response and voluntary cleanup costs and related legal fees, and the Company received, or expects to receive, reimbursement pursuant to general liability insurance coverage for approximately $43,000, $37,000 and $29,000, respectively, of such amounts. While annual environmental remedial response and voluntary cleanup expenditures, including legal fees, have generally been constant from year to year, with increases over time, the Company expects it will be able to fund such expenditures from cash flow from operations. The timing of expenditures depends on a number of factors, including regulatory approval of cleanup projects, remedial techniques to be utilized and agreements with other parties. As of March 1, 2026 and March 2, 2025, there were no amounts recorded in accrued liabilities for environmental matters.

Management does not expect that environmental matters will have a material adverse effect on the liquidity, capital resources, business, consolidated results of operations or consolidated financial position of the Company. See Note 10 of the Notes to Consolidated Financial Statements included in Item 8 of Part II of this report for a discussion of the Company's contingencies, including those related to environmental matters.

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Critical Accounting Policies and Estimates:

The following information is provided regarding critical accounting policies that are important to the Consolidated Financial Statements and that entail, to a significant extent, the use of estimates, assumptions and the application of management's judgment.

General

The Company’s Discussion and Analysis of its Financial Condition and Results of Operations are based upon the Company’s Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these Consolidated Financial Statements requires the Company to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the related disclosure of contingent liabilities. On an ongoing basis, the Company evaluates its estimates, including those related to sales allowances, inventories, valuation of long-lived assets, income taxes, restructurings, and employee benefit programs. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

The Company believes the following critical accounting policies affect its more significant judgments and estimates used in the preparation of its Consolidated Financial Statements.

Recently Adopted Accounting Pronouncement         

See Note 13 of the Notes to Consolidated Financial Statements included in Item 8 of Part II of this Report for a discussion of the Company’s recently adopted accounting pronouncements.

Revenue Recognition

The Company recognizes revenue when a customer obtains control of promised goods or services in an amount that reflects the consideration to which the providing entity expects to be entitled in exchange for those goods or services. We recognize revenue when all of the following criteria are met: (1) we have entered into a binding agreement, (2) the performance obligations have been identified, (3) the transaction price to the customer has been determined, (4) the transaction price has been allocated to the performance obligations in the contract, and (5) the performance obligations have been satisfied. The majority of the Company’s shipping terms define the performance obligation to be satisfied upon shipment.

Inventories

Inventories are stated at the lower of cost (first-in, first-out method) or net realizable value. The Company writes down its inventory for estimated obsolescence or unmarketability based upon the age of the inventory and assumptions about future demand for the Company’s products and market conditions.

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Valuation of Long-Lived Assets

The Company assesses the impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. In addition, the Company assesses the impairment of goodwill at least annually. Important factors that could trigger an impairment review include, but are not limited to, significant negative industry or economic trends and significant changes in the use of the Company’s assets or strategy of the overall business.

Income Taxes

As part of the process of preparing its consolidated financial statements, the Company is required to estimate its income taxes payable in each of the jurisdictions in which it operates. This process involves estimating the actual current tax expense together with assessing temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included in the Company’s Consolidated Balance Sheets. Deferred income taxes are provided for temporary differences in the reporting of certain items, such as depreciation and undistributed earnings of foreign subsidiaries, for income tax purposes compared to financial accounting purposes. In evaluating the Company’s ability to recover the deferred tax assets within the jurisdiction from which they arise, all positive and negative evidence is considered, including the scheduled reversal of deferred tax liabilities, projected future taxable income, tax planning strategies and results of recent acquisitions. If these estimates and assumptions change in the future, the Company may be required to record additional valuation allowances against its deferred tax assets, resulting in additional income tax expense in the Company’s Consolidated Statements of Operations, or conversely to further reduce the existing valuation allowance, resulting in less income tax expense. The Company evaluates the realizability of the deferred tax assets and assesses the need for additional valuation allowances quarterly.

Tax benefits are recognized for an uncertain tax position when, in the Company’s judgment, it is more likely than not that the position will be sustained upon examination by a taxing authority. For a tax position that meets the more likely than not recognition threshold, the tax benefit is measured as the largest amount that is judged to have a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority. The liability associated with unrecognized tax benefits is adjusted periodically due to changing circumstances and when new information becomes available. Such adjustments are recognized entirely in the period in which they are identified. The effective tax rate includes the net impact of changes in the liability for unrecognized tax benefits and subsequent adjustments as considered appropriate by the Company. While it is often difficult to predict the final outcome or the timing of resolution of any particular tax matter, the Company believes its liability for unrecognized tax benefits is adequate. Interest and penalties recognized on the liability for unrecognized tax benefits are recorded as income tax expense.

35